The leading share index edged lower on Wednesday as investors refocused on fundamentals, specifically weaker-than-expected euro zone data, with the Greek debt restructuring theatricals out of the way for now.
Recession concerns increased after data showed the euro zone's service sector unexpectedly shrank in February, with Europe being Britain's main market for its goods.
The FTSE ends the trading day fairly flat off the back of lacklustre trading and average volume, as a fall in Banking and Mining Stocks offset the gains by Oil and defensive stocks, said Mike Mason, trader at Sucden Financial Private Clients.
Banks were the biggest blue chip fallers, extending Tuesday's weakness seen after the second euro zone bailout for Greece failed to alleviate concerns about the debt-laden country, with the cautious mood not helped by a downgrade of Greece's credit rating by Fitch on Wednesday.
Worries remain about the implementation of key austerity measures in Greece which were crucial in getting the bailout.
Royal Bank of Scotland
The FTSE 100 index <.FTSE> ended down 11.65 points, or 0.2 percent at 5,916.55, retreating further from a seven-month closing peak reached on Monday, stuck in a tight trading range established earlier in February between around 5,850 and 5,920.
Volume was 95 percent of the 90-day daily average.
Miners fell back in tandem with copper prices as demand confidence was rattled by weak export data from top consumer China, as well as doubt over Greece's ability to implement tough reforms aimed at cutting its debt.
Vedanta had added 7 percent on Tuesday on reports of a potential consolidation of both its Sterlite and Sesa Goa minorities.
Gains in integrated oils, however, provided underlying strength for the blue chips, led by BG Group
Royal Dutch Shell
Europe's largest drinks can maker Rexam
Outsourcing firm Capita
U.S. blue chips <.DJI> were also modestly lower by London's close, down 0.2 percent as concern over the weak euro zone data countered solid U.S. existing home sales.
The improving housing and construction sector is another piece of evidence that the U.S. is on the right track although market spectators will be looking closely for signs of the deteriorating economic picture in Europe affecting the progress in the United States, Jordan Lambert, trader at Spreadex.
(Reporting by Jon Hopkins; Editing by Hans-Juergen Peters)